Indirect compensation or benefits form an important part in the Management’s Kit for satisfaction and motivation of employees.
Indirect compensation is defined as rewards or benefits which an organization provides to its employees in addition to emolument.
There are several categories of benefits, which are required by Law to be provided. Whereas there are some, which are voluntarily provided, and others are subject matter of Collective Bargaining.
In view of diverse nature of benefits, as well as variations in the needs and preferences of employees, not all the benefits are taken positively hence their effectiveness stands diminished. There are cases where although benefit may be regarded as reward, but its importance against emolument, status or development opportunities, etc. may be on a lower footing making it less attractive to a certain category of employees.